Why High Gas Prices Could Linger For The Entire Year

Will the average family have anything left to spend on extras? For many, the return of the 2 percent payroll tax was enough of a setback. Now, with gas topping $4 a gallon in some areas, consumers are scrambling to pay the pump...and the rest of their bills.

After 32 straight days of increases, gas prices could scuttle more than a household budget— they could sink the fragile economic recovery.

August 2012 – The Midwest drought took its toll on corn and therefore on ethanol. Prices spiked and threatened to hurt Obama’s approval rating.

So why is this year different?

Gas prices typically rise in late February or early March, which has analysts worried that this year’s early increases could mean higher prices are in store for the rest of the year. “This year...prices have risen largely because of higher oil prices from positive economic news and recent regional refinery issues,” Avery Ash, wrote in a AAA Fuel Gauge report in January.

Refineries are switching over from winter to summer fuel, which is more expensive to produce.

A Hess refinery in New Jersey that supplies 7.5 percent of the Northeast's gas is closing.

Midwinter maintenance has led some refineries to go offline temporarily.

Demand for gas is up, fueled in part by more people returning to work.

If the trend continues, it could have a profound effect on the economy. Not only would consumer spending slow, but a sustained gas price crisis could lead to inflation. One silver lining: It could increase demand for energy independence.